View full sizePatrons take in "The Memory Project" at the Centre for the Living Arts' Space 301. (Press-Register/Mike Kittrell)

MOBILE, Alabama -- The Center for the Living Arts recently won a $150,000 grant to transform one of its properties into an arts park, but the city's uncertain financial future is casting a shadow on the organization's future, according to its director.

The grant, awarded by the Connecticut-based Educational Foundation of America, is the largest single financial contribution dedicated to a special project in center's history, said Robert Sain, the director, in a recent newsletter to the CLA membership.

The center plans to use the money to transform a vacant lot that it owns on Dauphin Street, the heart of downtown's entertainment district, into an art-themed park that could play host to temporary art installations, concerts, films and other spectacles.

The grant, however, is for matching funds, which means that the center will have to raise $150,000 on its own in order to get the entire grant.

Sain, who was not available to comment Monday, implied that, if the city cuts funding because of its financial troubles, the fundraising climate could be difficult.

From Sain's newsletter:

How do we leverage this national funding into increased support from the hometown? How do we demonstrate that funding arts and culture is an investment, not an expense? What can we do to make sure the City of Mobile moves forward and is able to continue its support for all of our cultural organizations? Are we really willing to let the minority resistance to a 1- cent tax jeopardize the quality of life for decades to come? We now face a paradox: at the same time that we have national support to grow, we face the reality of severe reductions if the City of Mobile cannot maintain its funding to help us operate the Saenger and Space 301.

The city of Mobile faces a potential budget shortfall of up to $29 million in fiscal 2013, though that figure can be significantly reduced by deferring certain bills and diverting some money from the city's savings.

Mayor Sam Jones had promised to submit his budget to the City Council by mid July, but he has since moved his time table back as he continues to lobby for his chosen remedy for the shortfall, a sales tax increase.

If no additional revenue source is approved, Jones has said, the gap will have to be closed through cuts, including to the 60 or so non profits that receive about $3 million in grants from the city each year.

"The Saenger Theater, as well as the theater at the Civic Center serve vital
roles in the city's cultural and arts community," Jones said today in a statement regarding Sain's newsletter. "We are striving
to do all we can to make sure we keep the funding in place."

The CLA operates Space 301, a contemporary art gallery, and the Saenger Theatre, a historic music venue.

The city, which owns the Saenger, signed 30-year lease with the center in 1999. Under the lease, the CLA is obligated to pay $10 per month in rent and the city is obligated to pay at least $50,000 in cash or in-kind services to support the maintenance of the venue.

Payments to the CLA have grown since the contract was first signed 13 years ago. According to this year's budget, the city will pay the organization $200,000.

Chris Barraza, a spokeswoman for the center, said that the city's financing is vital to the organization's operation.

The city's money underwrites the operation of the theater, a huge draw for the center's membership, who enjoy first priority to tickets when shows are announced, she said.

"I'd say probably 75 percent of our members joined because of the theater," she said.